- The Pentagon stood accused of sitting on a damaging report
from its own auditors on a $108.4m (£56.6m) overcharge by Halliburton
for its services in Iraq yesterday.
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- In a scathing letter to George Bush, Democratic congressmen
Henry Waxman of California and John Dingell of Michigan said the Defence
Contract Audit Agency's audit was completes last October - before the election.
They also note that 12 separate requests to the Pentagon to view the completed
audits on the contractor's $2.5bn contract to supply fuel and other services
in post-war Iraq had been ignored.
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- "We would like to know why this audit report - and
audit reports on nine additional task orders - are being withheld from
Congress," they wrote.
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- "We also want to know what steps you are taking
to recover these funds from Halliburton."
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- In a second public letter yesterday, Mr Waxman accused
Bush administration officials of deliberately withholding information on
overcharges by Halliburton from UN auditors - at its behest. Some $1.6bn
of the $2.5bn Halliburton contract was funded from Iraqi oil revenues overseen
by the UN.
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- "The evidence suggests that the US used Iraqi oil
proceeds to overpay Halliburton and then sought to hide the evidence of
these overcharges from the international auditors," the letter says.
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- The audit, released by the congressmen on Monday, offers
the most definitive glimpse so far of overbilling by Halliburton, once
run by the vice president, Dick Cheney.
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- In the most startling transaction, it charged the Pentagon
$27.5m to ship $82,100 worth of cooking and heating fuel to Iraq from Kuwait
- 335 times the actual cost of the liquified petroleum gas, a charge the
Pentagon auditors said was "illogical".
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- The firm and its subsidiary, Kellogg, Brown and Root
(KBR), face several investigations, including a fraud inquiry from the
justice department. A preliminary Pentagon audit, focused on the immediate
aftermath of the US-led invasion, found KBR overcharged the Pentagon by
$61m for kerosene and other fuels.
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- Critics of Halliburton are convinced this represents
just a fraction of the overcharges.
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- The audit released this week covers only one of 10 task
orders undertaken under the $2.5bn no-bid contract awarded immediately
after the invasion of Iraq.
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- However, the overcharges identified in the single task
order already dwarf the $61m (£32m) in previously discovered overcharges.
Halliburton charged army corps of engineers $875m (£457m) to supply
fuel from May 2003 to March 2004. Auditors questioned $108.4m (£56.6m)
of those costs.
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- As the Congressmen note, the auditors criticised charges
in nearly every area, saying the firm misled auditors and failed to supervise
sub-contracts. "Halliburton failed to demonstrate its prices for Kuwaiti
fuel were 'fair and reasonable'," the auditors say. They also note
Halliburton refused repeatedly to provide information on costs of obtaining
fuel from Turkey and Jordan, or reveal how it selected its contractors
in Kuwait.
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- A Halliburton spokeswoman, Wendy Hall, said it was forced
into paying, and charging, high costs because of the security situation
following the war. "Transporting fuel into Iraq was a mission fraught
with danger, which increased the prices that firms were willing to offer
for trans portation," she told reporters. "The report fails to
take into account the fact KBR performed an urgent mission at the army's
request and the mission took place in a wartime environment."
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- The lawyer for an army corps of engineers whistle-blower
said that his client was set to be interviewed for a second time by Pentagon
investigators on April 4 over her claims of contracting abuse involving
KBR.
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- Guardian Unlimited © Guardian Newspapers Limited
2005
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- http://www.guardian.co.uk/Iraq/Story/0,2763,1438694,00.html
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